This Thursday, new cable Internet customers in Beaumont, Texas will no longer have unmetered Internet bandwidth - they’re guinea pigs in a new pricing scheme being pushed by Time-Warner that will give users between 5 and 40 gigabytes in total monthly data usage (uploads and downloads combined). Data usage over that amount will be billed at $1 per gigabyte. Competitor Comcast is also considering metered bandwidth.
The goal is to limit average data usage, allowing Time-Warner to get more customers into their existing fiber infrastructure. Since there is little or no competition for Internet connectivity, they don’t have to worry so much about losing customers.
The entire model lies in stark contrast to the competitive markets set up in South Korea and elsewhere, and it’s going to hurt innovation in the U.S. Many new startups, particularly those focused on video and online gaming, rely on their customers having access to high bandwidth, all you can eat connections.
Cable companies have regional monopolies and are able to extract excess profits from these monopolies. Innovation and the health of the ecosystem is dependent on a competitive marketplace. If one part of the market falls behind (and we’re already behind in broadband penetration and average data speeds), it becomes very difficult for the ecosystem to remain competitive.
I’m almost never in favor of government intervention of markets, but monopolies are an exception. We need to encourage data usage by consumers, not the opposite. The cable companies are standing in the way of economic growth and innovation. We can’t afford a decade or more of screwing around before trying to fix this. Let’s start now.
reinkefj (#57) and hyokon (#90) are right. It’s about our level of regulation. We keep regulating and then we wonder why things don’t work. So we blame the companies being regulated.
In order to get competition and lower prices, we’ll have to dig and string cable (#90) and we don’t want that. There are regulations all over the place that make it extremely difficult and expensive.
An example in another industry is rail. I’m in Chicago and it’s been a huge rail hub for scores of years. CN wants to buy out a small railroad that has some tracks that ring the metro area to alleviate congestion. Both Senators (Durbin and Obama) and many politicians are against it. At some point, the railroads will switch traffic and the many, many jobs that go with it will go away. At a macro level, it hurts our competitiveness as a country.
It used to be that growth was more important, but that is changing as we regulate more and more things.
I think Tom Friedman had an article a few weeks ago (at least someone sent it to me a few weeks ago) about how it seems that the country is “falling behind.”
What few people will do is make the connection between how we regulate and what the effects are.
We make it hard to look for oil where we think it is, drill for oil where we know it is, and refine what we have (I think we import actual gasoline now) - and then we wonder why the prices are so high!!!
That polar bear act that came out a few weeks ago is a recipe for disaster as it adds a very powerful layer of regulation over large parts of the economy.
Who is to blame? Modern Liberals who don’t like capitalism and who want everything to be equal - equal misery.
(Talking about oil prices, Durbin and other Democrats are fighting BP’s expansion of the Whiting refinery outside Chicago. Chicago has the highest gas prices and the local media is incapable of making a connection between the ignorant Durbin’s and the other Democrat’s actions and even higher prices. So all they do is blame the oil comapnies. Arg!!!)
Anyways, our level of regulation is really hurting us. Btw, Net Neutrality will just make it worse - much worse. And most people won’t even know why.
If this @$#$ shows up in Austin. I will find another provider.
I (and my wife) telecommute. It keeps us off the road, helps our environment (we don’t use much gas this way), BUT I do have to move large files around. Like ‘um uploading my work to the office - usually done overnight . My wife takes remote control of her office machine and works that way. We both have constant VPN connections to our respective companies networks. What is all this gonna cost in the end? Oh yeah, lets throw VOIP (Vonage) into the picture. All of this is gonna add up, yes? Don’t worry, if it doesn’t TW is gonna change the caps so it does, or make them protocol specific, so they can get their little hands on my little packets (like VOIP or VPN traffic ) and charge me for that also.
I pay a flat rate for my phone (local and long distance (ahh - the wonders of competition) - hence the reason this REALLY seems like a move backwards, a flat rate for my TV (what’s next - they gonna charge me by the show I watch - they will if this model works out), and (since we have wells) a flat rate for our water (well, (no pun intended) until they come out and put a meter on it) which is being discussed. AND, if I have to pay for all this “bandwidth” I am consuming (evidently I am one of the evil 5% that is making this change necessary), why would I NOT go back to dial up, if all I can do with my expensive broadband is check email and read the occasional news story. Once TW starts this nonsense there is no telling where it will end.
I guess I knew this was coming, but it is a bad day for the Internet.
They say they are trying to punish the 5% but they also found a way to screw the other 95% by implementing a small cap as it is. The majority of households within America have atleast one computer and I would say a majority of those households have a gaming system (PS, XBOX, Wii). With this in mind you have the you have to taken into account what uses bandwith. All of these systems do, and if you have a home network with multiple computers and/or consoles that means you have that many more machines hooked up to the internet.
With this in mind, which of these devices can you use to buy and download video games/movies/music. Answer: All of them. High definition movies on demand tolling up to 9GB, video games upwards to the same extent, on top of that Album downloads, and the list goes on. This of course is not mentioning Netflix’s latest release of a home appliance that once hooked up to your TV and Netflix account is a few hundred thousand DVDs on-demand. Not to mention the Apples version that was released a bit earlier. You may be saying to yourself “I just use the internet to check my email and browse the web”. Guess what, those ads that pop-up all over the place and are part of those webpages aren’t text. They are graphics that can add up quick and you pay for those too just like you pay for the commericals when you’re watching TV, but there isn’t a limit on how much TV you can watch.
I feel Time Warners bandwidth cap “test market” is a lead towards monoplizing it’s grasp on on-demand video market, hindering Net Neutrality, and plain ol’ greedyness(I’ll lead into why I think this later). I know that I may be jumping ahead of myself but when was the last time any of you saw a commercial for “Unlimited bandwidth” internet usage of late? After thinking about it for a while I would have to say I haven’t seen one in quite a while, but why? That used to be the thing a few years back, terms like “bandwidth caps” and “metered usage” would get everyone laughing or making fun of you of saying, let alone thinking, of such a thing. If you think about it I just may be right and because of this I bring in the greed factor. The average broadband user pays between 30-50 bucks a month, right? Have you ever wondered where does that money go toward?
I’ve been with Time Warner for about 8 years now and I’ve never had any “big” problems but as of lately once Comcast fiasco started I got to thinking, doesn’t the fee I pay for my monthly internet access go towards not only maintaining the their network but provide funds towards upgrading it? If not, why and where does the money go? Now like I said I’ve been and loyal customer to Time Warner for eight years and never thought I would consider leaving after Ted told the RIAA and MPAA to F themselves(in so many words) when the issue of Piracy came up. Not that I’m a pirate but to have someone up high fighting for something that is blatantly right for a change, but I digress. It goes back to mutiple home appliances that can use bandwidth, for legal means, and end up screwing everyone when it comes to this cap, especially being at 40GB. So what does Time Warner say to the cap, well if you go over its $1 per 1GB. Right, so if you have company over or want to be lazy one weekend you sit in your favorite spot in the couch, grab the remote, browse one of several means of selecting on-demand videos/games, download, and let the entertainment beind but wait… you have to check your current usage, take into account well do I want to watch a couple movies or play a new video game. I don’t really want to drive to the store with gas prices but I don’t want to go over my limit. Ah screw it, I’ll download them and go over the limit this one time. The thing is it doens’t stop there, you’re over your limit for the rest of the month. What are you going to do, unplug all your bandwidth hogging devices from the internet until the month is over? No! HELL NO! Oh and do not even think about a roll over plan to where you don’t use your monthly alloted limit you’re entitled to have it roll over to the next month. Use it or lose it pal but don’t too much or you’ll owe us more. You can see where I’m going with this so I’ll stop.
From what you have read in other articles and other blogs I hope that if you are a Time Warner customer that you notify them of what you think. Voice your opinion even if you think it won’t matter. A little tenacity goes a long way.
This is a huge step back for the internet, and I think this is going to bite them in the rear if they go through with it. The problem with their reasoning is this: In my area, my cable access goes fast; and it’s just fine. I get a good 400-800k on downloads, and that is fine with me. So obviously the so-called five percent in my area has little to no affect on my connection…so obviously this is just bs and an excuse for them to do this. If I’m going to have to worry about going over my allowed gigs of data, I am going to switch to something else. When unlimited downloading was introduced on dial-up, everyone had to move to unlimited or they lost business. With the advent of different methods of accessing high-speed internet, this is sure to hurt the cable companies, and is a stupid move completely brought on by sheer greed. FIOS is only the beginning, and I am betting that internet access via cell phones is only going to get faster and better, and is also moving towards unlimited usage. Does anyone else find it humorous that every industry (dial-up internet, cell phone, etc.) gets more affordable overtime, but not cable tv/internet? It’s the only thing that seems to keep going up in price overtime (besides my monthly utility bill)…I wish they would bring more competition to this market; monopolies never benefit anyone. I will switch to a slower connection rather than worry about my internet usage each month…that’s why I switched from the dial-up connection I had back in the day to an unlimited. Who wants to sit and worry about ANOTHER big bill coming in the mail? I don’t.
Once this starts we will see lawsuits against any company that makes software that accesses the internet without user permission. That’s most software out there.
My first thought was in line with several of you. If they start this I’d just switch to ATT. WRONG!
ATT recently announced plans to do the same thing. I don’t have a reference, but you can google it same as me.
That means that both major internet providers in Austin TX will be doing the metered internet. I may just cancel my account with TW (both cable and internet) and drop to the $5 netflix version. Makes me mad, but in the long run I’ll save money. Besides, I have internet at work….
I’ll encourage everyone I know to do the same if they enact the ridiculous policy.
People use the interenet for many different uses. if you consider that most companies nolonger provide disks for their products. These online disks often cost as much as the product would if in the store. Now you would have to pay download fees on top of it.
Graphic programs, upgrading programs, games all would cost extra. Granted there are some people out there we can call (grama suffers) those that don’t do anything with there computers but send and recieve email and occationally check out e-bay.
But the internet is a buisness. To controll useage is like telling the population that does know how to use there computer they are going to be seperated into who has money and who doesn’t have money.
Man can you imagine searching for something and getting a hundered video advertisements that eat up your bandwith. LOL and then find out that page doesn’t have what you needed on it.
Some how I think were being scamed.
As long as it’s an optional pricing scheme. I might even save money. I don’t see an issue with this. You have to look at things from both sides sometimes. They have bandwidth costs. Electric to power the routers and their servers. This scheme was ok when people didn’t use much bandwidth (what’s it matter if you download a few games) now that things are becoming more bandwidth intensive TW is finding that the open policy is costing them quite a bit. Now the key here is that time warner makes its a fair cost per mega byte. If things cost more per mb transfer people will start using bandwidth a bit better. Compression codecs will continue to improve so we can send more info down the same pipes. TW would have money to gradually improve the lines and and / replace more equipment. Like mentioned alot of people would even SAVE money with a cost per/ mb pricing model. I would look forward to it, some users would opt with the all you can use model. As long as there are options This would not be much of an issue. Like others mentioned also wireless keeps getting better and cheaper so compitition is on the way and the more TW attempts to screw people over the more finincal insentive there is to get wireless data out into the world .